While all Performance Standards are applicable to this investment, IFCs environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards. If IFCs investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards

PS 1 – Assessment and Management of Environmental and Social Risks and Impacts
PS 2 - Labor and working conditions
PS 3 - Resource Efficiency and Pollution Prevention
If IFC’s investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards
Wasion’s manufacturing operations do not result in any significant noise, process wastes, emissions or other risks and impacts. Also, it’s existing and upcoming the manufacturing facilities are both located in the well-developed industrial zones and far from the nearby residential communities. The traffic to and from the facility will be limited and the facility is very well connected with wide roads. The company does not deploy armed security guards. Hence, impacts related to PS4: Community Health Safety and Security are not expected for this investment.

Impacts related to PS5: Land Acquisition and Involuntary Resettlement, PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources, PS7: Indigenous Peoples and PS8: Cultural Heritage are not expected because the project is located in a well-developed industrial zone and this did not involve land acquisition and involuntary displacement as envisaged under PS5.

This is a category B project according to IFC’s Procedure for Environmental and Social (E&S) Review of Projects because a limited number of specific E&S impacts may result that can be avoided or mitigated by adhering to generally recognized performance standards and guidelines.

Key E&S risks and issues related to this investment include: assessment and mitigation of the impacts due to the company’s activities; the company’s capacity and systems to manage its social and EHS performance in accordance with local regulatory requirements as well as IFC Performance Standards and applicable EHS guidelines; assurance of fair, safe and healthy working conditions; utilization of equipment and operational practices that maximizes conservation of energy, water and process materials including recycling and reuse initiatives; management of emissions and wastes, including workplace air quality; management of hazardous materials used in and hazardous wastes generated from the manufacturing process; and the impacts of operations on local ambient environment.

IFC's appraisal considered the environmental and social management planning process and documentation for the project and gaps, if any, between these and IFCs requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through the implementation of these measures, the project is expected to be designed and operated in accordance with Performance Standards objectives.

- Environmental & Social Assessment:

For its operational facility, the company has procured all the regulatory permits, and complies with the mitigation measures and monitoring requirements as per the permit conditions. For the project all the local regulatory requirements for establishment of such a facility, including an Environmental Impact Assessment (EIA) study have been completed.



- Management Systems:



As part of its corporate culture, Wasion has articulated its mission as: “creating optimum value in electricity, water, gas and heat measurement and energy efficiency management...with…leading technologies and products and…make irreplaceable contributions to the conservation and efficient utilization of electricity, water, gas and heat. With a sense of social responsibility, Wasion will spare no efforts in making substantial and sustained contributions to decent employment, environment protection, civilization and harmony”. (http://www.wasion.com/EN/wh.htm).



Building upon this mission statement, Wasion has articulated its corporate policies (quality, environmental, safety policy etc.), and implemented certified management systems as per ISO 9001 for quality, ISO 14001 for environmental management and OSHAS 18000 for occupational health and safety management. These certifications are valid for existing production facility, and recently passed the recertification audits.



The company is also in the process of implementing the SA 8000 Standard, one of the world’s first auditable social certification standards for decent workplace. The company expects to receive this certification by July 2015 for its existing facility.



Once the new facility in Xiangtan becomes operational, Wasion will implement similar management systems in the new facility and apply for third party certification in due course. This will also include the approach to E&S management as outlined below and as applied at the existing operational facility.



- Organization:

As summarized in the Wasion Group Management Manual, the company has in place an organization structure with specific roles and responsibilities and reporting lines of the various functional units. At the corporate level, there is an EHS Head who reports to the management team and is also responsible for implementation of management systems at the facility level. The EHS Head coordinates with the Management Systems Department, Manufacturing Department and Security Department for day to day safety and security management. In addition, Wasion has constituted a safety committee, as described under PS2 below.



- Monitoring & Reporting:



The company has put in place an elaborate monitoring and reporting program as documented in its management system manual. This program covers several KPIs related to manufacturing, human resources (HR) and EHS; the latter includes the workplace, as well as emissions and discharges outside the facility. This information is then used for regular reporting to
top management, regulatory agencies as well as for feedback to all employees in day to day operation (e.g., safety related KPIs used for safety awareness and training). The monitoring program is commensurate with the simple nature of manufacturing operation, and complies with the local regulatory, as well as the World Bank Group (WBG) EHS Guideline requirements.



- On-site Emergency Response Plan:



Based on the identified hazards and risks, an on-site emergency response plan has been developed by the company. Accordingly, potentially hazardous areas have been identified and evacuation routes and assembly points have been designated and clearly marked. Fire drills are regularly conducted, firefighting equipment tested and regularly maintained, as was verified during the site visit. There have been no emergencies or incidents in the past at the company’s operational facility.

Wasion currently employs around 3,700 employees, with about 2,000 workers engaged in meter manufacturing activities and those associated with the shop floor, 600 engineers in the R&D department, and the remainder in sales, sales support, quality control, supply chain and back office functions such as administration, finance etc., and other management functions. Female employees constitute approximately 50% of the total workforce. Wasion hires very few temporary or casual workers, and these are just to accommodate fluctuations in the work load for short periods of time (about 50-100 people working for a few days during peak work load for non-manufacturing activities such as loading/unloading etc.). Wasion outsources transport, security (unarmed), cleaning, gardening and canteen to licensed contractors.



Wasion’s upcoming new facility is of the same scale and size of the existing facility. As such, Wasion plans to staff it up on the similar lines as its existing facility. However, the production ramp-up and thus recruitment will be carried out in a phased manner over the coming several months. Waison will apply a similar approach to HR management as outlined below for the existing facility, including that as outlined in reference to occupational health and safety.



- Human Resource (HR) Policy, Management

Wasion has in place documented HR policies and operational procedures which are in line with the company’s corporate vision and mission as well as Chinese labor law requirements. The HR manual documents the terms of employment, policies and procedures for compensation and other benefits, training, performance appraisal, and promotions.



As mentioned earlier, with Wasion’s ongoing initiative to implement SA8000, its HR policies are accordingly updated, where necessary. The company’s HR policies and procedures are thus consistent with the requirements of PS2, including those related to child and forced labor, non-discrimination, freedom of association, grievance mechanism etc.



This manual is accessible to all the employees, who also receive a copy of an employee handbook at the time of joining, together with their appointment letter and contract.



In addition to wages, the company provides for other benefits such as transport, food in its cafeteria and separate male and female dormitories on site for its employees.



Dormitories are equipped with fire hydrants, air-conditioning and other necessary infrastructure (e.g., adequate parking space for private vehicles of employees) thus designed for safe and comfortable living conditions for its employees. The dormitories were found to be in good condition with amenities at par or better than similar staff housing in China and consistent with IFC Good Practice Note on Workers’ Accommodation.



In 2007, Wasion established “Staff Support Fund” with a donation from Chairman of the Board Mr. Ji Wei with the aim to support the company’s needy staff and their families during difficult ti
mes. In 2014, the fund gave out a total of over RMB 810,000 ($130,000) to help 275 staff members and their families who were in need.



- Workers Union, Grievance Mechanism:



A registered workers union is active at Wasion, and addresses the concerns and grievances raised by the employees through the monthly communication meetings that it organizes.



In addition, the company provides a locked mail box in the office near the main gate, called the “CEO mailbox” for receiving employee grievances (including anonymous complaints). Employees can also raise their grievances through their supervisors and/or the HR department.



After receiving such information, HR handles the case, and reports the key conclusions and suggestions to the managers. Employees can also voice their opinions and grievances through annual employee survey conducted by HR department.



A documented Internal Communication Procedure stipulates the ways in which the grievances are handled and addressed and appropriate feedback is provided to concerned employees.



- Training and Human Resources Development



Wasion has an extensive human resource development and training program for its employees, which is managed by the HR department. Several structured training programs are developed for different levels of employees and cover behavioral aspects as well as technical/functional training. EHS is an important component of induction training as well as the ongoing training calendar.



- Occupational Health and Safety



Wasion has put in place an elaborate safety management system at the company, as per OHSAS 18001 standard, which includes third party certification. The Safety Policy guides the overall safety management at the facility. Safety orientation is an integral part of the induction training for all the new employees.



The shop floor has hi-technology; the high precision machines are designed and built in Japan, with automated operations. All the moving parts are enclosed and normal operation of the machines requires minimal contact by workers, thus minimizing the potential for an accident.



All shop floors are neatly organized following 5S principles (sort, set in order, shine, standardize and sustain), and all the KPIs, work instructions and standard operating procedures (SOPs) are displayed on the shop floor. Personal protection equipment such as gloves, safety shoes, masks and glasses is provided to all the workers on the shop floor, which is commensurate with the nature of operations and potential safety hazards.



Adequate fire detection and suppression equipment is fitted across the facility in accordance with the potential fire risks. Fire exits and the locations of fire extinguishers are clearly marked. Firefighting training is provided to the employees and fire drills are regularly conducted. Contractors’ employees working on-site (security, housekeeping etc.) are also participate in safety trainings and drills.



Wasion has constituted a 2
0-member Safety Committee for its operational facility, which has 2 teams, viz. management and operational. The committee meets monthly to review the safety related issues. In addition, the operational team conducts a monthly safety patrol, while the management members of the safety committee carry out a quarterly safety patrol across the facility.



As a result of all these efforts, Wasion has not had any reportable lost time accident or incident in the past in its facility involving its own staff or the contractors’ employees.



- Air Quality in Workplace



Wasion has manufacturing capability and infrastructure in place for lead-free soldering and compliance with EU regulations related to Restriction on Hazardous Substances (RoHS). However, little over half of its total production is still based on lead soldering, as influenced by the domestic market demand.



As such, Wasion regularly monitors workplace air quality for various parameters, including heavy metals such as lead. The workplace monitoring reports, reviewed by IFC during the site visit, confirmed that the company is very well within the local guidelines as well as those recommended by the National Institute for Occupational Safety and Health (NIOSH) USA (at only about 10% of the permissible limits). 

The manufacturing process comprises a totally automated process of machining, soldering and final assembly of various parts of smart meters. Most of the manufacturing process does not require water or chemicals, nor does it result in any wastes. Cleaning solvents are the only chemicals used for the process. The latter will also apply to the project, along with the management of wastes and the like as outlined below.



The manufacturing process is not resource intensive and the primary inputs are only printed circuit boards, electronic and mechanical components, casing and packaging, and electrical energy.



Water is used mainly for domestic use and is sourced from the local authorities. The domestic wastewater is treated in an onsite treatment plant, as per the environmental permit condition, before discharging into public sewers, which is further treated in the centralized treatment plant. For the new facility, domestic wastewater will be discharged to the sewers of the industrial zone, for further treatment as per the environmental permit condition.



Wasion complies with all relevant regulations for the storage, handling and disposal of hazardous materials used in the production process. The small quantity of notified hazardous wastes (such as empty solvent containers, rejects and electronic scrap from the manufacturing process etc.) are disposed of through licensed waste management contractors, as per the regulatory authorizations, and this will apply at new facility as well.



Adequate controls during the storage and handling are in place and the quantities of solid waste thus generated and disposed of are regularly monitored, documented and reported to the authorities.



- Energy Sources and GHG Emissions:



Primary energy requirement for the project is that of electricity, which is procured from the national grid. Small capacity diesel generators are installed on site as backup generators, for use in the rare case of power failure.



The GHG emissions of the project are, therefore, dominated by those due to the electricity consumption, with some contribution from natural gas, and diesel as well as loss of refrigerant from HVAC systems. The project had estimated emissions of 11,000 tons of CO2e during the year 2014. Since the upcoming new facility is identical to the existing one, the GHG emissions from the new facility are also expected to be around 11,000 tons of CO2e, once the facility is fully operational.



While the project results in limited GHG emissions, the company’s smart meters and solutions for power grid help in reducing the wastage of electricity and hence the coal consumption indirectly, thereby reducing costs and GHG emissions.

“Love the nature, love the mother country, be actively involved in acts in line with public interests and be a socially responsible person.” is how Wasion defines its staff and Corporate Social Responsibility, and organizes its community engagement activities accordingly. These activities include, donations to primary schools in the mountains to purchase sports equipment; setting up “Wasion Caring Service Posts for Cleaning Workers” in the community to provide places to rest, food, first aid kits and other supplies and services to cleaning workers.

To further enhance its ongoing stakeholder engagement and communication, Wasion will disclose this Environmental and Social Review Summary document (ESRS) locally.

Wasion will disclose this ESRS locally at the following address:

Wasion Group Holdings Limited
Unit 2605, 26/F, West Tower, Shun Tak Centre,
168–200 Connaught Road Central,
Sheung Wan, HongKong

All inquiries and comments may be directed to:

Mr. Choi Wai Lung Edward
Telephone: (852) 2865 2228  
Telefax: (852) 2865 2823
E-Mail: mailto:edward.choi@wasiongroup.com.hk

Broad Community Support is not applicable for this project